Correlation Between Belpointe PREP and Five Point

Can any of the company-specific risk be diversified away by investing in both Belpointe PREP and Five Point at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Belpointe PREP and Five Point into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Belpointe PREP LLC and Five Point Holdings, you can compare the effects of market volatilities on Belpointe PREP and Five Point and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Belpointe PREP with a short position of Five Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Belpointe PREP and Five Point.

Diversification Opportunities for Belpointe PREP and Five Point

0.02

Correlation Coefficient

Belpointe PREP  Five Point

Significant diversification

The 3 months correlation between Belpointe and Five is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Belpointe PREP LLC and Five Point Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Five Point Holdings and Belpointe PREP is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Belpointe PREP LLC are associated (or correlated) with Five Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Five Point Holdings has no effect on the direction of Belpointe PREP i.e., Belpointe PREP and Five Point go up and down completely randomly.

Pair Corralation between Belpointe PREP and Five Point

Allowing for the 90-day total investment horizon Belpointe PREP LLC is expected to under-perform the Five Point. But the stock apears to be less risky and, when comparing its historical volatility, Belpointe PREP LLC is 1.2 times less risky than Five Point. The stock trades about -0.06 of its potential returns per unit of risk. The Five Point Holdings is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  305.00  in Five Point Holdings on February 28, 2024 and sell it today you would earn a total of  12.00  from holding Five Point Holdings or generate 3.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Belpointe PREP LLC  vs.  Five Point Holdings

Belpointe PREP LLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Belpointe PREP LLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Five Point Holdings

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Five Point Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Five Point is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Belpointe PREP and Five Point

The main advantage of trading using opposite Belpointe PREP and Five Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Belpointe PREP position performs unexpectedly, Five Point can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Five Point will offset losses from the drop in Five Point's long position.

The idea behind Belpointe PREP LLC and Five Point Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.